2024 -- S 2725 AS AMENDED | |
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LC005419 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2024 | |
____________ | |
A N A C T | |
RELATING TO BUSINESSES AND PROFESSIONS -- DEFENDING AFFORDABLE | |
PRESCRIPTION DRUG COSTS ACT | |
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Introduced By: Senators Valverde, and Pearson | |
Date Introduced: March 05, 2024 | |
Referred To: Senate Health & Human Services | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Title 5 of the General Laws entitled "BUSINESSES AND PROFESSIONS" |
2 | is hereby amended by adding thereto the following chapter: |
3 | CHAPTER 19.3 |
4 | DEFENDING AFFORDABLE PRESCRIPTION DRUG COSTS ACT |
5 | 5-19.3-1. Short title. |
6 | This chapter shall be known and may be cited as the “Defending Affordance Prescription |
7 | Drug Costs Act”. |
8 | 5-19.3-2. Definitions. |
9 | As used in this chapter, the following terms have the following meanings: |
10 | (1) "340B drug" means a drug that has been subject to any offer for reduced prices by a |
11 | manufacturer pursuant to 42 U.S.C. § 256b and is purchased by a covered entity as defined in 42 |
12 | U.S.C. § 256b(a)(4). |
13 | (2) "340B entity" means an entity participating or authorized to participate in the federal |
14 | 340B drug discount program, as described in 42 U.S.C. § 256b, including its pharmacy, or any |
15 | pharmacy contracted with the participating entity to dispense drugs purchased through the 340B |
16 | drug discount program. |
17 | (3) "Health insurer" means every nonprofit medical service corporation, hospital service |
18 | corporation, health maintenance organization, or other insurer offering or insuring health services; |
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1 | the term shall, in addition, include any entity defined as an “insurer” under § 42-62-4 and any third- |
2 | party administrator when interacting with health care providers and enrollees on behalf of the |
3 | insurer. |
4 | (4) "Pharmaceutical manufacturer" means a person that manufactures a prescription drug |
5 | and sells, directly or through another person, the prescription drug for distribution in this state. |
6 | (5) "Pharmacy" has the meaning set forth in § 5-19.1-2. |
7 | (6) "Pharmacy benefit manager (PBMs)" means a person or entity employed by for-profit |
8 | companies that manage prescription drug benefits on behalf of private insurers, Medicare Part D |
9 | drug plans, government employee plans, large employers, and Medicaid managed care |
10 | organizations (MCOs). |
11 | (7) "Rebate(s)" means all price concessions paid by a manufacturer or any other third party |
12 | to PBMs including rebates, discounts, credits, fees, manufacturer administrative fees, or other |
13 | payments that are based on actual or estimated utilization of a covered drug or price concessions |
14 | based on the effectiveness of a covered drug. |
15 | 5-19.3-3. Prohibition of certain discriminatory actions related to reimbursement of |
16 | 340B entities. |
17 | (a) With respect to reimbursement to a 340B entity for 340B drugs, a health insurer, |
18 | pharmacy benefit manager, other third-party payor, or its agent shall not do any of the following: |
19 | (1) Reimburse a 340B entity for 340B drugs at a rate lower than that paid for the same drug |
20 | to entities that are not 340B entities or lower reimbursement for a claim on the basis that the claim |
21 | is for a 340B drug. |
22 | (2) Impose any terms or conditions on any 340B entity with respect to any of the following |
23 | that differ from such terms or conditions applied to non-340B entities on the basis that the entity |
24 | participates in the federal 340B drug discount program set forth in 42 U.S.C. § 256b or that a drug |
25 | is a 340B drug including, without limitation, any of the following: |
26 | (i) Fees, charges, clawbacks, or other adjustments or assessments. For purposes of this |
27 | section, the term "other adjustment" includes placing any additional requirements, restrictions, or |
28 | unnecessary burdens upon the 340B entity that results in administrative costs or fees to the 340B |
29 | entity that are not placed upon other entities that do not participate in the 340B drug discount |
30 | program, including affiliate pharmacies of the health insurer, pharmacy benefit manager, or other |
31 | third-party payor. |
32 | (ii) Dispensing fees that are less than the dispensing fees for non-340B entities. |
33 | (iii) Restrictions or requirements regarding participation in standard or preferred pharmacy |
34 | networks. |
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1 | (iv) Requirements relating to the frequency or scope of audits of inventory management |
2 | systems. |
3 | (v) Requirements that a claim for a drug include any identification, billing modifier, |
4 | attestation, or other indication that a drug is a 340B drug in order to be processed or resubmitted |
5 | unless it is required by the Centers for Medicare and Medicaid Services or the Medicaid program. |
6 | (vi) Any other restrictions, conditions, practices, or policies that are not imposed on non- |
7 | 340B entities. |
8 | (3) Require a 340B entity to reverse, resubmit, or clarify a claim after the initial |
9 | adjudication unless these actions are in the normal course of pharmacy business and not related to |
10 | 340B drug pricing. |
11 | (4) Discriminate against a 340B entity in a manner that prevents or interferes with any |
12 | patient's choice to receive such drugs from the 340B entity, including the administration of such |
13 | drugs. For purposes of this section, it is considered a discriminatory practice that prevents or |
14 | interferes with a patient's choice to receive drugs at a 340B entity if a health insurer, pharmacy |
15 | benefit manager, or other third-party payor places any additional requirements, restrictions, or |
16 | unnecessary burdens upon the 340B entity that results in administrative costs or fees to the 340B |
17 | entity including, but not limited to, requiring a claim for a drug to include any identification, billing |
18 | modifier, attestation or other indication that a drug is a 340B drug in order to be processed or |
19 | resubmitted unless it is required by the centers for Medicare and Medicaid services or the executive |
20 | office of health and human services in administration of the Medicaid program. |
21 | (5) Include any other provision in a contract between a health insurer, pharmacy benefit |
22 | manager, or other third-party payor and a 340B entity that discriminates against the 340B entity or |
23 | prevents or interferes with an individual's choice to receive a prescription drug from a 340B entity, |
24 | including the administration of the drug, in person or via direct delivery, mail, or other form of |
25 | shipment, or creation of a restriction or additional charge on a patient who chooses to receive drugs |
26 | from a 340B entity. |
27 | (6) Require or compel the submission of ingredient costs or pricing data pertaining to 340B |
28 | drugs to any health insurer, pharmacy benefit manager, or other third-party payor. |
29 | (7) Exclude any 340B entity from the health insurer, pharmacy benefit manager, or other |
30 | third-party payor network or refusing to contract with a 340B entity for reasons other than those |
31 | that apply equally to non-340B entities. |
32 | 5-19.3-4. Exclusion. |
33 | Nothing in this chapter applies to the Medicaid program as payor when Medicaid provides |
34 | reimbursement for covered outpatient drugs as defined in 42 U.S.C. § 1396r-8(k). |
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1 | 5-19.3-5. Prohibition on certain discriminatory actions by a pharmaceutical |
2 | manufacturer, agent, or affiliate of such manufacturer related to 340B entities. |
3 | (a) A pharmaceutical manufacturer, agent, or affiliate of such manufacturer shall not deny, |
4 | restrict, prohibit, or otherwise interfere with, either directly or indirectly, the acquisition of a 340B |
5 | drug by, or delivery of a 340B drug to, a pharmacy that is under contract with a 340B entity and is |
6 | authorized under such contract to receive and dispense 340B drugs on behalf of the covered entity |
7 | unless such receipt is prohibited by the United States department of health and human services. |
8 | (b) A pharmaceutical manufacturer, agent, or affiliate of such manufacturer shall not |
9 | interfere with a pharmacy contracted with a 340B entity. |
10 | 5-19.3-6. Violations. |
11 | (a) The commission of any act prohibited by this chapter is considered a violation of the |
12 | Rhode Island deceptive trade practices act set forth in chapter 13.1 of title 6, as may be amended |
13 | from time to time, and subject to any penalties hereunder; provided, however, that there shall be no |
14 | right to bring a private or class action pursuant to such chapter 13.1 of title 6. |
15 | (b) A violation of chapter 13.1 of title 6 ("deceptive trade practices") shall occur each time |
16 | a prohibited act is committed. |
17 | 5-19.3-7. Federal preemption. |
18 | (a) Nothing in this chapter is to be construed or applied to be less restrictive than federal |
19 | law for a person or entity regulated by this chapter. |
20 | (b) Nothing in this chapter is to be construed or applied to be in conflict with any of the |
21 | following: |
22 | (1) Applicable federal law and related regulations. |
23 | (2) Other laws of this state if the state law is compatible with applicable federal law. |
24 | (c) Limited distribution of a drug required under 21 U.S.C. § 355-1 is not to be construed |
25 | as a violation of this chapter. |
26 | SECTION 2. This act shall take effect upon passage. |
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LC005419 | |
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EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO BUSINESSES AND PROFESSIONS -- DEFENDING AFFORDABLE | |
PRESCRIPTION DRUG COSTS ACT | |
*** | |
1 | This act would prohibit any health insurer, pharmacy benefit manager, or other third-party |
2 | payor from discriminating against any 340B entity participating in a drug discount program. This |
3 | act would further prohibit a pharmaceutical manufacturer or wholesaler from denying, restricting, |
4 | prohibiting or otherwise interfering, directly or indirectly, with any contract to dispense or receive |
5 | 340B drugs. Violation of the provisions of this act would be considered a violation of chapter 13.1 |
6 | of title 6 ("deceptive trade practices"). |
7 | This act would take effect upon passage. |
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LC005419 | |
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